Just to make sure, you can get it to run if you're using any other swap chain, correct? Because it could be an issue with your machine lacking support for D3D11. <.<

Why, exactly, do you need a GDI-compatible swap chain? There's very little reason to render GDI controls on top of a rendered scene. If you're doing as I suspect and working on a level editor of sorts, it would be much better to simply create the D3D device on a control (in GDI, all controls are simply windows, and should have a window handle (hwnd) that can be used in the device creation), while having your editing controls placed elsewhere, such as on a property grid (possibly floating) docked to the right of the editing window.

As far as figuring out what's wrong (barring a lack of support for D3D11), use the debug version of DXGI and build your project. That should allow you to see what is going wrong with the swap chain creation.